ASIC has pledged to go after pseudo-advice providers, with executive director Joanna Bird highlighting two projects the corporate regulator was undertaking to identify unlicensed advice and scams that target unwary consumers.
Speaking via video link at the Professional Planner Digital Licensee Summit this morning, Bird said ASIC was currently doing “a lot of work” around unlicensed advice.
“We took the view that consumers, in this current environment, would be particularly vulnerable to unlicensed advice, so we developed an internal working party that’s looking at trying to proactively identify examples of unlicensed advice and respond to them really quickly using skills from across ASIC,” Bird explained.
For those looking to take advantage of consumers desperate for advice in the wake of the pandemic, Bird warned that strong action was on the cards.
“That working party is doing a lot behind the scenes but I can’t really talk about that because most of it is likely to end up in enforcement action,” she revealed.
As an example of this work, Bird highlighted ASIC’s recent letter to superannuation funds asking them to help communicate the danger in real estate agents coercing members to use early access relief measures to pay rent, conduct which it said is of “significant concern”.
In the letter ASIC said real estate agents may be contravening the Corporations Act, which could have serious ramifications.
“Tenants facing financial difficulty need sound financial guidance and potentially debt counselling,” the letter stated. “ASIC intends to monitor this situation closely, and if contraventions of the licensing requirements of the Corporations Act are found, ASIC will not hesitate to act swiftly to protect vulnerable consumers.”
Bird also noted that the regulator was on the lookout for scam operators.
“We’ve also developed a scams working party… because again we’ve assessed consumers are particularly vulnerable to scams at this point in time,” she said.
Sharing the panel via video link was Financial Planning Association chief executive Dante De Gori, who said the representative group appreciated the monitoring work ASIC was doing in the area.
“We do have concerns with people potentially delivering unlicensed advice under the guise of things like financial coaching and wellbeing [despite] not necessarily being licensed to do so,” De Gori said. “It’s one of those areas we want to continue to explore further and support ASIC in.”
